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ehidna [41]
3 years ago
12

In 2011, Edwin Ryan bought 100 shares of a listed stock for $5,000. In June 2014, when the stock’s fair market value was $7,000,

Edwin gave this stock to his sister, Lynn. No gift tax was paid. Lynn died in October 2014, bequeathing this stock to Edwin, when the stock’s fair market value was $9,000. Lynn’s executor did not elect the alternate valuation. What is Edwin’s basis for this stock after he inherits it from Lynn’s estate?
a.$0
b.$5,000
c.$7,000
d.$9,000
Business
1 answer:
lara [203]3 years ago
4 0

Answer:

B) $5,000

Explanation:

Under Section 1014 (a) the basis of any property acquired by a decedent (Lynn) through a gift within 1 year of death and passed back to the donor (Edwin) due to the decedent's death, will be adjusted to the basis immediately prior to the death.

In other words, since Lynn died within 1 year of receiving Edwin's gift, Edwin's basis will be the same as Lynn's basis.

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Akika Corporation started as a small firm and has grown substantially in the past decade. Its interests span from electronics to
AysviL [449]

Answer: d. Unity of direction

Explanation:

The principle of Unity of Direction is one of the 14 principles of Fayol in relation to administration. Summarised into one phrase, the principle would mean,<em> One Head One Plan</em>.

This is because the principle believes that when in a company, different departments aim to achieve distinct goals, the departments should have a sole leader and a sole plan for the goals that should be accomplished so that there is no confusion.

This is why the Akika Corporation wants to create independent domains that reflect the actions they perform and will have the distinct roles needed to help them perform the actions efficiently.

6 0
3 years ago
Hardwig Inc. is considering whether to pursue a restricted or relaxed current asset investment policy. The firm's annual sales a
DerKrebs [107]

Answer:

d. 2.24%

Explanation:

total annual sales = $3,600,000

fixed asset turnover = total sales / fixed assets = 4, that means that total fixed assets = $3,600,000 / 4 = $900,000

debt = 50% = $450,000

equity = 50% = $450,000

EBIT = $150,000

net income = $150,000 x (1 - 40%) = $90,000

restricted policy:

asset turnover = 2.5

sales = $3,600,000 x (1 - 15%) = $3,060,000

EBIT = $135,000

net income = $81,000

assets = $3,060,000 / 2.5 = $1,224,000

equity = $1,224,000 x 50% = $612,000

ROE = $81,000 / $612,000 = 13.24%

relaxed policy:

asset turnover = 2.2

EBIT = $150,000

net income = $90,000

assets = $3,600,000 / 2.2 = $1,636,364

equity = 50% x $1,636,364 = $818,182

ROE = $90,000 / $818,182 = 11%

difference between ROEs = 13.24% - 11% = 2.24%

8 0
3 years ago
Dan, Francis, and Pedro were on a team at their engineering company. Though Dan had the most experience of the three, he did not
elena-14-01-66 [18.8K]

Answer:

Shared.

Explanation:

Shared leadership is a leadership style that comprehensively disseminates leadership obligation, to such an extent that individuals inside a group and association lead one another.

5 0
3 years ago
Read 2 more answers
Dandee Lions, Inc. Has a cash balance of $105,000; accounts payable of $290,000; inventory of $213,000; accounts receivable of $
Firdavs [7]

Answer:

The answer is $758,000.

Explanation:

Net working capital is total current asset minus total current liability i.e total current asset - total current liability

Total current assets equals($918,000) $105,000 +$290,000 + $213,000 + $310,000.

Total current liabilities equal($160,000) $95,000 +$65,000

Therefore, net working capital is:

$918,000 - $160,000

= $758,000

3 0
3 years ago
Windsor Corporation has the following balances at December 31, 2017.Projected benefit obligation $2,561,000Plan assets at fair v
Vilka [71]

Answer:

$584,000

Explanation:

Calculation for the amount of pension liability that should be reported

Projected benefit obligation $2,561,000

Less Plan assets at fair value 1,977,000

Pension liability $584,000

Therefore the Pension liability balance at December 31, 2017 will be $584,000

7 0
3 years ago
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